Reject! Why innovative managers might choose not to foster affordable innovation – evidence from three countries

Affordable innovations refer to new products and services that address customers with a low willingness or ability to pay. Although they can provide considerable economic and societal benefits, managers often prefer premium over affordable innovation. To understand the factors that drive managers to support (or reject) affordable innovations, we conduct a cross-country study and test a structural equation model with 319 participants from Germany, USA, and South Africa. The results show that individuals’ innovativeness plays a pivotal, yet contradictory role for managers’ attitudes towards affordable innovation. While general innovativeness leads to favorable attitudes, technological innovativeness drives the rejection of affordable innovation. Individuals’ perceptions of firm-level and product-level factors as well as cross-country differences are relevant, too. Individuals’ affordable innovation rejection attitude, in turn, leads to less investment into affordable innovation projects. With this research, we contribute to innovation management literature by explaining the conditions under which managers reject affordable innovation.